1996 (10) TMI 81 - SC - Customs

Whether the element of deliberate or conscious omission had been established? Held that - The Tribunal has by the impugned order rightly come to the conclusion that the communication of 22-7-1985 does not purport to be a show cause notice and the two demand notices cannot be construed as show cause notices as envisaged by the Act. It has further taken note of the fact that the two demand notices do not refer to any suppression of facts. On the question of suppression the Tribunal notices that there is no material tendered by the Department to indicate that there was any attempt on the part of the assessee to deceive the Government or induce the authorities to release the goods notwithstanding the expiry of the period of the exemption notification. The Tribunal notices that there is no active concealment it rightly states that suppression envisages a deliberate and conscious omission to state a fact with the intention of deriving wrongful gain. the presentation of the Manifest to the Customs Authority could be effected before or after the arrival of the vessel and in the instant case the Manifest had been effected after the arrival of the vessels. Therefore, the authorities were also aware that the vessel had arrived after 31st December, 1983, the last date for availing of the benefit of the exemption notification. The Tribunal, therefore, also came to the conclusion and in our opinion rightly, that the element of deliberate or conscious omission had not been established and, therefore, even on that count it did not uphold the Department s contention. We see no reason to take a different view. Appeal dismissed.

Summary

Issues:
1. Interpretation of Customs Act provisions regarding the determination of rate of duty for imported goods.
2. Validity of demand notices issued by the Assistant Collector of Customs.
3. Compliance with Section 28 of the Customs Act regarding the issuance of show cause notices.
4. Application of the proviso to Section 28(1) in cases of suppression of facts.
5. Tribunal's assessment of suppression of facts in the case.
6. Adherence to the procedure outlined in previous judicial decisions.

Analysis:
1. The judgment concerns the importation of goods and the determination of duty rates under the Customs Act. The importers presented bills of entries for three consignments of Tin Imported Black Plate in December 1983, seeking duty exemption until December 31, 1983. However, the vessels carrying the goods arrived in January 1984, after the exemption period had ended. The Court interpreted Sections 15 and 46 of the Customs Act, emphasizing that the relevant date for duty determination is the date of bill of entry presentation or actual entry, whichever is later.

2. The Assistant Collector of Customs issued demand notices in December 1984 for short-levied duty without following the proper procedure. The importers protested, arguing that the notices were premature and not in line with Section 28 of the Customs Act. Subsequently, a letter was sent justifying the notices based on alleged suppression of facts. However, the Court found that the demand notices were time-barred under Section 28(1)(b) and that the subsequent justification lacked a formal show cause notice, violating principles of natural justice.

3. The proviso to Section 28(1) allows for an extended limitation period in cases of suppression of facts. The Deputy Collector of Customs invoked this provision in a letter to justify the demand notices issued beyond the statutory time limit. However, the Court highlighted the necessity of serving a formal show cause notice to the assessee before resorting to this provision, emphasizing procedural fairness and the right to representation.

4. The Tribunal's assessment of suppression of facts revealed no deliberate attempt by the importers to deceive authorities for wrongful gain. The Court agreed with the Tribunal's findings, noting the absence of active concealment or intentional omission to establish suppression. Additionally, the Court referenced a previous decision outlining the procedural requirements for such cases, emphasizing the importance of factual clarity and adherence to established procedures.

5. Ultimately, the Court dismissed the appeal, affirming the Tribunal's decision. The importers' failure to establish deliberate suppression of facts or wrongdoing supported the rejection of the Department's contentions. The judgment concluded that the demand notices were invalid, lacking proper adherence to procedural requirements and principles of natural justice.

6. A separate appeal related to the initial judgment was dismissed in light of the primary appeal outcome, with no costs awarded in either case.